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Soft Risk Sentiment And Firmer US Dollar Prompts Turnaround

COMMODITIES
  • The spike in government bond yields and subsequent sell-off in equity markets caused the broad-based rally in commodity prices to reverse Thursday/Friday.
  • Metals were hit hardest by the reversal with Silver suffering 4% losses on the session. Copper was close behind (-3.75%) as a mixture of profit taking and opportunistic selling produced a sharp move to the downside. Gold followed suit, shedding 2.5%.
  • Despite the volatile retracement, Copper futures (HG1) are still posting 0.66% gains on the week, indicating the underlying optimism for the bellwether metal.
  • Both WTI and Brent crude futures have suffered as well losing between 1.5-2% on the day. In similar fashion, both post weekly gains in the region of 5% and there is a strong argument that recent price action is a consolidation from overbought conditions.

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